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Inputs Present Value Current stock Price $      62.00 Risk Free 2.5% Beta 1.1 Expected Market Return 7.0% Dividend growth rate 6.0% Required Rate of Return PV Dividend This Year's Dividend This Year $        0.80 Growth Next Year $        0.92 15% 2 $        1.06 15% 3 $        1.22 15% Future Stock...

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Question

Finance

InputsPresent
Value
Currentstock Price$      62.00
RiskFree2.5%
Beta1.1
ExpectedMarket Return7.0%
Dividendgrowth rate6.0%
RequiredRate of Return
PVDividend
This Year's DividendThis Year$        0.80Growth
Next Year$        0.9215%
2$        1.0615%
3$        1.2215%
FutureStock Price36.0%
Intrinsic ValueIntrinsic Value

Answer & Explanation Solved by verified expert
3.9 Ratings (798 Votes)
From the give dataRequired return of the stock can be calculated using CAPMmodelKe Rf BetaRmRf 25 11425 745Next    See Answer
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Transcribed Image Text

InputsPresentValueCurrentstock Price$      62.00RiskFree2.5%Beta1.1ExpectedMarket Return7.0%Dividendgrowth rate6.0%RequiredRate of ReturnPVDividendThis Year's DividendThis Year$        0.80GrowthNext Year$        0.9215%2$        1.0615%3$        1.2215%FutureStock Price36.0%Intrinsic ValueIntrinsic Value

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